Dual-activation financial products

ABSTRACT

A system operating in conjunction with a financial account permits joint activation of a card associated with the financial account. An event-detection module detects an event related to the card and an authorization component for permitting certain individuals to use the card. A messaging module generates account-related messages and transmitting these messages to individuals associated with the financial account.

TECHNICAL FIELD

Embodiments of the invention relate generally to systems and methods forreimbursing insured individuals for losses, and, more particularly, tosystems, methods, and financial-services products that permit multipleindividuals to use stored-value cards to purchase replacement items.

BACKGROUND OF THE INVENTION

Consumers and businesses often purchase insurance to cover losses topersonal property. In many cases, insurance related to a home orbusiness may cover more than just the physical structure. For example, atypical homeowner's policy covers losses of items within the home, suchas furniture, clothing, electronics, appliances, artwork, jewelry, andother items. Renter's insurance covers many of the same items, excludingfixtures and the like.

When a loss occurs, conventional practice is to have the insurancecompany (the “issuer”) assess the damage, estimate the loss, and providea live check to the insured. In cases in which the property is heldjointly (e.g., a husband and wife), the check is made payable to bothindividuals. While the issuer of the policy may control the amount ofthe check, it cannot determine how the insured will actually use themoney. Moreover, issuing live checks is expensive, and prone to loss andfraud.

The retail and financial services industries have, over the past fewyears, actively embraced the “stored-value card” or “debit card”concept. These cards provide the holder with a pre-defined spendinglimit based on either a bank-account balance or a set amount associatedwith the card. The cardholder may use the card at participating retailestablishments to purchase goods and services until the funds associatedwith the card are exhausted. Like credit cards, debit cards and somestored-value cards require authorization or activation by an individualcardholder prior to an initial use, and, in some cases, the use of apersonal identification number (“PIN”) to use the card.

What is needed is a system and associated techniques and products thatallow insurance companies to issue stored-value cards which may be usedto purchase replacement items (or any other items needed) based onlosses actually incurred by the insured. Further, because the insured isoften a company or multiple individuals, such cards may require jointactivation and, as such permit use by more than one person.

BRIEF SUMMARY OF THE INVENTION

In one aspect of the invention, a system that operates in conjunctionwith a financial account is provided for permitting joint activation ofa card associated with the financial account. The system includes anevent-detection module for detecting an event related to the card and anauthorization component for permitting certain individuals to use thecard. The system further includes a messaging module for generatingaccount-related messages and transmitting these messages to individualsassociated with the financial account.

In some instances, the financial account is established in response aninsurance claim. The financial account may represent an amount of moneyavailable to the owners of the insurance policy on which the claim wasfiled. In some cases, rules may be associated with the financial accountthat dictate, for example, categories of goods and/or services on whichthe money in the account may be spent, who may spend it, a date by whichthe money must be spent, and/or establishments where the money may bespent. The system may also include one or more data storage devices forstoring card-activation information, cardholder information, and/or therules governing usage of the cards.

In another aspect of the invention, a device associated with a financialaccount is provided. The device may include a data storage medium forstoring computer-readable program code governing the authorization anduse of the device. In some instances, the device is a stored-value card,a debit card or a credit card. In other cases, the device is a virtualdevice, such as an on-line credit, gift certificate, or balance madeavailable to its users. The program code may include instructions forauthorizing use of the card by multiple individuals associated with thefinancial account and, in some cases, require activation of the card byeach of the multiple individuals prior to its use. The program code mayinclude instructions for implementing rules governing use of the device,such as restrictions on goods or services to which the money in theaccount may be applied, who may spend it, a date by which the money mustbe spent, and/or establishments where the money is spent.

In yet another aspect, a computer-implemented method is provided forauthorizing and governing the use of a debit card, stored-value card,credit card, or similar device. Alternatively, the device may be avirtual device, such as an on-line credit, gift certificate, or balancemade available to its users. The computer-implemented method comprisesinitiating a financial account based on an insurance claim and issuingcards to the insured parties. A first insured party activates the card,and messages are sent to subsequent parties to request activation. Onceall required parties have activated the card(s), the card(s) may be usedto purchase goods and services. In some case, restrictions are imposedon usage of the cards.

BRIEF DESCRIPTION OF THE DRAWINGS

The present invention is described in detail below with reference to theattached drawing, wherein:

FIG. 1 is a flow chart illustrating the operation of a multi-useractivation card system in accordance with an embodiment of theinvention; and

FIG. 2 is a block diagram illustrating the components of a multi-useractivation card system in accordance with an embodiment of theinvention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

When a consumer or business suffers a loss of property due to fire,theft or other event, an insurance claim may be filed to cover thereplacement cost associated with the loss. Often, the claim arises froman insurance policy owned either by an entity (e.g., a corporation) or acouple (e.g., a husband and wife). In either case, common practice is toissue a live check in the amount deemed appropriate given the loss. Forexample, if a fire consumes clothing, appliances and household items ina couple's home, the couple can file a claim against their homeownerspolicy requesting reimbursement for the lost items. Once an amount isagreed upon, the insurer issues a check, typically made payable to thecouple jointly.

FIG. 1 illustrates one aspect of the present invention in which astored-value card is used as the method of payment and requiresactivation, i.e., an authentication and identification procedureperformed by the cardholders in order to authorize its use. As usedherein a “card” may refer to a debit card, a credit card, a gift card,an online stored-value account, or other device (either physical orvirtual) that is associated with a financial account. In some instances,as described above, activation may be required from both a husband and awife, whereas in other instances (e.g., where the insured is a business)activation may be required from more than one officer of the company.Specifically, an insurance claim is filed (Element 1). The claim ischecked against a database (Element 2) to ensure that the claim is validand to identify the persons to which the proceeds of the claim are to bepaid. In some instances, additional information may be appended to theuser information (Element 3) (e.g., bank account number, demographicinformation, loss items, etc.) to complete the claim. Once the claim isconfirmed and complete, information about the policy holder(s), anamount, activation requirements, and any redemption restrictions areforwarded to a card-issuer database (Element 4) and stored therein.

To “fund” the card(s), the insurer transfers money to a bank, creditunion, or an account at one or more retail entities in the name of theinsured party, thus establishing a financial account for their use(Element 5). A card issuer (typically a bank) issues one or more cards(Element 6) linked to the account that may be used to access the fundsin the account. Where the insured party comprises more than one person(e.g., a husband and wife) or is a company, a determination is made asto the number of cards needed (Element 7), and the card issuer and/orthe insurer may, in such cases, require multiple activation eventsbefore the card(s) may be used. By requiring multiple parties toactivate a card, the insurer and/or the financial institution issuingthe card ensures that the card(s) are not being used by unauthorizedindividuals. In some cases, only one card may be issued, but multipleindividuals (each having a different PIN or other unique password oridentification token) may be required to activate the single card. Inother cases, each individual may be issued a unique card, but none ofthe cards may be used until all of the cards (or, in some cases, somesubset of the cards) are activated. For example, if a college studenthas a computer stolen from a dormitory and it is covered under herparents' homeowner's policy, a card may be issued to the parents and tothe college student, but only require activation by each of the parents.

In each case in which multiple activation events are required, a firstparty activates the card (Element 8) either by calling an activationcenter, logging on to an activation website, swiping the card at anauthorized ATM or other similar device, presenting himself personally ata retail establishment where the card may be used, or other procedurefor enabling secure tranmission of account and/or personal informationto the card issuer. In some cases, the activation information providedby the cardholder is confirmed by comparing it to data stored in thecard-issuer database, the user database, or both. A message may then besent to the person who first activated the card confirming heractivation event. Messages may also be sent (Element 9) to theadditional cardholders (of the same physical card or of different cardslinked to the same account) requesting activation. In some cases, themessages may be sent asynchronously—i.e., each message is sentindependently of the others and the order in which the messages are sentand acted upon is irrelevant. In other cases, subsequent partiesactivate the card(s) (Element 10) in turn, each receiving a message toactivate his card after the previous person in the queue has activated.If the last cardholder has not activated the card (Decision Element 11and Element 12), the process repeats, and a new message is sent to thenext cardholder. If all the necessary cardholders have activated thecard(s), the card(s) are activated (Element 13) and the cardholders canbegin drawing funds from the associated account (Element 14).

FIG. 2 illustrates a system for implementing the techniques describedabove. A card or cards(s) 20 may have stored thereon computer-readableinstructions and/or data governing activation and/or usage restrictions,by means, e.g., of a magnetic strip 22, an embedded chip or memorydevice 24, or both. The card 20 can be, for example, a debit card, acredit card, a transfer funds card, a smart card, a stored-value card, agift card, an ATM card, a security card or an identification card. Thecard 20 may also include components for providing or processing eitheraccount, identity, payment, health, transactional, or other informationand communicating with central processing units or computers operated bythe providers of services, such as credit card institutions, banks,health care providers, universities, retailers, wholesalers or otherproviders of goods or services employers, or membership organizations.Card features may also enable the card to communicate with or beaccessed by other devices, including those used by retailers (e.g.,point-of-sale computers), and personal computers used in other businessapplications or at home (for example, a personal computer having abuilt-in or attached card reader).

A central computing device 26 processes activation and authenticationtransactions related to the use of the card 20, and includes anevent-detection module 28, a messaging module 30 and in some instancesone or more data storage devices 32. The data storage devices 32 and/orcentral computing device 26 may store financial information pertainingto the account related to the card 20 as well as instructions foractivating and authorizing use of the card. The central computer device26 may send and receive communications regarding card activation andusage over a network 34, such as the Internet or, in some cases, aprivate network. Cardholders may use one or more computing and/orcommunication devices (e.g., a computer 36 or a hand-held device 38) tosend and receive activation and authorization information from thecentral computing device 26.

For example, the central computing device 26 receives messages and/orevents from cardholders wishing to activate and use the card 20 topurchase goods and services. However, in some implementations, the card20 may require more than one activation event, and in such cases theevent-detection module 28 identifies an activation request from acardholder and processes computing instructions that solicit theadditional necessary activations—e.g., initiatiating one or moremessages to be formatted and sent to additional cardholders forsubsequent activation.

In some instances, the location and/or identity of the cardholder andthe communication device used to activate the card may be stored in thedata storage device 32 to provide further authentication credentials.For example, a cardholder may be required to activate a card from aparticular device such that the MAC ID, IP address or telephone numbersent with the activation information to the central computing device 26matches data stored in the data storage device 32.

In addition to multi-party activation requirements, the card (or cards)may also be subject to various usage rules. In some cases, the usagerules may be guidelines or incentives (e.g., using the card at aparticular retailer allows the cardholder to receive special discountsand other offers) whereas in other cases the rules may dictate that thecardholders use the cards at specific locations (either physical orweb-based) and/or for specific items. This may be the case where, forexample, the card is issued based on an insurance claim againstparticular property such as electronics and clothing lost in a housefire. In such instances, the card issuer or other third party mayoperate a retail portal that allows cardholders to shop for replacementitems directly, or in some cases via referrals to other participatingretailers.

Further, the insurance company or financial institution may attributeusage rules to the card (and, by extension, the funds in the accountassociated with the card) that limit what the cardholders can purchase,where they can purchase goods from, price restrictions on certain goods,and/or by when the purchases must be made. For example, “sub-accounts”may be established within the financial account and linked to the card.The funds in these sub-accounts may be earmarked for particular expensesand, in some cases, may be periodically replenished based on thecoverage provided by the insurer, or other agreements between theinsurer and the insured. Funds in the sub-accounts may be used to payfor certain qualifying expenses such as per diem food and lodgingexpenses, and, so long as the charges are at approved establishmentsand/or fall within specified limits, may not require authorization orapproval. These rules are stored in the data storage device 32 andimplemented each time the card is used. For example, the device 26 mayimplement a rules engine capable of implementing a suite of usage rules,only some of which will be applicable to a particular cardholder. Eachcardholder's database record may contain pointers to the rulesassociated with that cardholder, along with arguments or values(particular types of items, allowed retailers, spending limits, etc.)for the parameters called for in the rules. These may be modifiedcentrally as appropriate, and the specified rules in their current form,with the current parameter values, are invoked for each cardholderwhenever he uses the card.

For example, a couple who recently suffered a loss due to a fire intheir home may need to purchase new furniture, new clothing, newappliances, new electronics, and other household goods to replace thoselost or damaged in the fire. Using the technique and system describedabove, both the husband and wife may be sent a card, each being linkedto a financial account funded by their insurance company. The insurancecompany may instruct the card issuer that both the husband and wife needto independently activate their card so the both cards will beauthorized for use.

In some implementations, the merchandise available to the cardholder maybe pre-specified by the insurer funding the financial account to whichthe card is related. Such a restriction may be used to ensure that thecardholders use the funds from their claim to purchase actualreplacement items, and, in some cases, may allow the insurance companyto collect a referral fee from the retailer for channeling customers totheir establishment. In certain instances, the merchandise available toa particular cardholder may be limited only to the exact items (orapproved alternatives) claimed as lost pursuant to their policy. All ofthese restrictions may be implemented in rules, as described above.

The insurer may work with one or more online retailers (e.g.,Amazon.com) and/or brick-and-mortar retailers with an extensive onlinepresence (e.g., Sears, Target, etc.) to build cardholder-specificportals at which on the approved merchandise is available and, in somecases, use of the activated cards may be limited—by user-specificrules—to purchases from these portals. In other cases, the cards may beauthorized for use at any retail establishment without any restrictionswhatsoever.

The components of the central computing device 26 may be implemented bycomputer-executable instructions, such as program modules, beingexecuted by a computer. Generally, program modules include routines,programs, objects, components, data structures, etc. that performsparticular tasks or implement particular abstract data types. Thoseskilled in the art will appreciate that the invention may be practicedwith various computer system configurations, including hand-heldwireless devices such as mobile phones or PDAs, multiprocessor systems,microprocessor-based or programmable consumer electronics,minicomputers, mainframe computers, and the like. The invention may alsobe practiced in distributed computing environments where tasks areperformed by remote processing devices that are linked through acommunications network. In a distributed computing environment, programmodules may be located in both local and remote computer storage mediaincluding memory storage devices.

The central computing device 26 may include a general-purpose computingdevice in the form of a computer including a processing unit, a systemmemory, and a system bus that couples various system componentsincluding the system memory to the processing unit. Computers typicallyinclude a variety of computer-readable media that can form part of thesystem memory and be read by the processing unit. By way of example, andnot limitation, computer readable media may comprise computer storagemedia and communication media. The system memory may include computerstorage media in the form of volatile and/or nonvolatile memory such asread only memory (ROM) and random access memory (RAM). A basicinput/output system (BIOS), containing the basic routines that help totransfer information between elements, such as during start-up, istypically stored in ROM. RAM typically contains data and/or programmodules that are immediately accessible to and/or presently beingoperated on by processing unit. The data or program modules may includean operating system, application programs, other program modules, andprogram data. The operating system may be or include a variety ofoperating systems such as Microsoft WINDOWS operating system, the Unixoperating system, the Linux operating system, the Xenix operatingsystem, the IBM AIX operating system, the Hewlett Packard UX operatingsystem, the Novell NETWARE operating system, the Sun MicrosystemsSOLARIS operating system, the OS/2 operating system, the BeOS operatingsystem, the MACINTOSH operating system, the APACHE operating system, anOPENSTEP operating system or another operating system of platform.

Any suitable programming language may be used in accordance with thevarious embodiments of the invention. Illustratively, the programminglanguage used may include assembly language, Ada, APL, Basic, C, C++,C*, COBOL, dBase, Forth, FORTRAN, Java, Modula-2, Pascal, Prolog,Python, REXX, and/or JavaScript for example. Further, it is notnecessary that a single type of instruction or programming language beutilized in conjunction with the operation of the system and method ofthe invention. Rather, any number of different programming languages maybe utilized as is necessary or desirable.

The computing environment may also include other removable/nonremovable,volatile/nonvolatile computer storage media. For example, a hard diskdrive may read or write to nonremovable, nonvolatile magnetic media. Amagnetic disk drive may read from or writes to a removable, nonvolatilemagnetic disk, and an optical disk drive may read from or write to aremovable, nonvolatile optical disk such as a CD-ROM or other opticalmedia. Other removable/nonremovable, volatile/nonvolatile computerstorage media that can be used in the exemplary operating environmentinclude, but are not limited to, magnetic tape cassettes, flash memorycards, digital versatile disks, digital video tape, solid state RAM,solid state ROM, and the like. The storage media are typically connectedto the system bus through a removable or non-removable memory interface.

The processing unit that executes commands and instructions may be ageneral purpose computer, but may utilize any of a wide variety of othertechnologies including a special purpose computer, a microcomputer,mini-computer, mainframe computer, programmed micro-processor,micro-controller, peripheral integrated circuit element, a CSIC(Customer Specific Integrated Circuit), ASIC (Application SpecificIntegrated Circuit), a logic circuit, a digital signal processor, aprogrammable logic device such as an FPGA (Field Programmable GateArray), PLD (Programmable Logic Device), PLA (Programmable Logic Array),RFID processor, smart chip, or any other device or arrangement ofdevices that is capable of implementing the steps of the processes ofthe invention.

The network 34 may include a wired or wireless local area network (LAN)and a wide area network (WAN), wireless personal area network (PAN)and/or other types of networks. When used in a LAN networkingenvironment, computers may be connected to the LAN through a networkinterface or adapter. When used in a WAN networking environment,computers typically include a modem or other communication mechanism.Modems may be internal or external, and may be connected to the systembus via the user-input interface, or other appropriate mechanism.Computers may be connected over the Internet, an Intranet, Extranet,Ethernet, or any other system that provides communications. Somesuitable communications protocols may include TCP/IP, UDP, or OSI forexample. For wireless communications, communications protocols mayinclude Bluetooth, Zigbee, IrDa or other suitable protocol. Furthermore,components of the system may communicate through a combination of wiredor wireless paths.

While particular embodiments of the invention have been illustrated anddescribed in detail herein, it should be understood that various changesand modifications might be made to the invention without departing fromthe scope and intent of the invention. From the foregoing it will beseen that this invention is one well adapted to attain all the ends andobjects set forth above, together with other advantages, which areobvious and inherent to the system and method. It will be understoodthat certain features and sub-combinations are of utility and may beemployed without reference to other features and sub-combinations. Thisis contemplated and within the scope of the appended claims.

1.-14. (canceled)
 15. A system, operating in conjunction with afinancial account of an issuing institution having at least one cardassociated therewith for accessing funds in the financial account, thesystem requiring joint activation of usage of the at least one card byat least two cardholders associated therewith, the system comprising: acomputational processing unit for data processing and execution ofstored instructions; and associated with the processing unit, memory forstoring computer-readable instructions executable by theprocessing-unit, the instructions, when executed by the processing unit,implementing an event-detection module for (i) detecting a firstactivation event, related to the at least one card, received from one ofa plurality of cardholders associated with the financial account, and(ii) subsequently detecting, from each of the other cardholdersassociated with the financial account, a subsequent activation event,wherein the at least one card cannot be used by any of the cardholdersuntil all of the cardholders have activated the at least one card inaccordance with step (iii), and wherein the at least one card isauthorized to be used by each cardholder once all of the cardholdershave activated the at least one card.
 16. The system of claim 15 furthercomprising a data storage component for storing activation and usagerules associated with the card.
 17. The system of claim 16 wherein theusage rules limit use of the card to purchases of items within specifiedcategories.
 18. The system of claim 16 wherein the usage rules limit useof the card to purchases of specified items.
 19. The system of claim 18wherein the specified items comprise replacement items for items claimedon an insurance claim.
 20. The system of claim 16 wherein the usagerules limit use of the card to purchases from specific retailestablishments.
 21. The system of claim 15, wherein the at least onecard comprises at least one of a stored-value card, a debit card, or acredit card.
 22. The system of claim 15, wherein the at least one cardcomprises a virtual card.
 23. The system of claim 22, wherein the atleast one card comprises at least one of an online credit, an onlinegift certificate, or an online balance made available to thecardholders.
 24. The system of claim 15, wherein the at least one cardcomprises at least two cards.
 25. A computer-implemented method foractivating one or more cards associated with a single financial accountof an issuing institution, the one or more cards requiring jointactivation of usage by at least two cardholders associated therewith andfacilitating access to funds within the financial account uponactivation, the method comprising: executing, by a computationalprocessing unit, computer-readable instructions, stored in a memoryassociated with the computational processing unit, for (i) detecting afirst activation event, related to the one or more cards, received froma first cardholder associated with the financial account, and (ii)subsequently to the detection of the first detection event, detectingactivation events from each of the other cardholders associated with thefinancial account; and (iii) preventing use of the one or more cardsuntil all of the cardholders associated with the financial account haveactivated the one or more cards and authorizing the one or more cardsfor use once all cardholders associated with the financial account haveactivated the one or more cards.
 26. The method of claim 25 furthercomprising using the processing unit to execute instructions forlimiting use of the card to purchases of pre-specified merchandise. 27.The method of claim 26 wherein the pre-specified merchandise correspondsto items claimed as lost in an insurance claim filed by the cardholders.28. The method of claim 25, further comprising using the processing unitto execute instructions for limiting use of the card to purchases atpre-specified retail establishments.
 29. The method of claim 25, whereinthe one or more cards comprise at least two charge cards.
 30. The methodof claim 25, wherein the one or more cards comprise at least one of astored-value card, a debit card, or a credit card.
 31. The method ofclaim 25, wherein the one or more cards comprise a virtual card.
 32. Themethod of claim 31, wherein the one or more virtual cards comprise atleast one of an online credit, an online gift certificate, or an onlinebalance made available to the cardholders.